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Recently, there has been a renewed interest in the U-Zr system due to its technological importance as a promising metallic nuclear fuel. Polycrystals of hexagonal δ-phase UZr2 have been synthesized and studied by means of heat capacity, magnetic susceptibility, magnetization, electrical resistivity, magnetoresistance, thermoelectric power, thermal conductivity measurements at temperatures from 0.1 to 300 K, and in magnetic fields up to 9T. The system exhibits a delocalized nature of 5f-electrons with the presence of significant electronic disorder, consistent with the disordered type of its crystal structure. Furthermore, characteristic behaviors of low-temperature electrical resistivity and heat capacity are consistent with the presence of the non-magnetic Kondo effect in this material. Density functional theory calculations have been performed and compared to experimental results.